Revised August 31, 2011 to reflect changes to COBRA.
On this page:
- COBRA continuation benefits
- Beyond COBRA, other options for health insurance
- HIPAA rights: Continuing coverage once you have a new job
- Getting help with prescription drug costs
Health insurance is a big concern for anyone facing layoff. The safety net includes the federal COBRA law that allows you to continue your health insurance after employment ceases.
As soon as you get a notice of layoff, contact your plan sponsor (either your employer's personnel office or your benefit fund) to determine the date when your insurance coverage will cease, and to obtain information on your options. That should include information on the procedures for enrolling in COBRA to continue your coverage.
COBRA continuation benefits
What is COBRA?
When health coverage provided by your employer ends, you may opt to continue your existing insurance coverage under COBRA continuation benefits. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, says that if you lose your job for any reason other than "gross misconduct," you have the right to continue in your former employer's group plan for up to 18 months.
What types of benefits are covered under COBRA?
• Cafeteria Plans
• Dental Insurance
• Employee Assistance Programs that provide a specified number of visits
• Health Insurance (examples: Indemnity, PPO, POS and HMO
• Prescription Drugs
• Vision Care
• Health Reimbursement Arrangements (HRAs)
What are the eligibility requirements?
To be eligible for continued coverage, you must be covered under a group health plan until the day before the layoff occurs. If your employment began and was terminated before you were actually eligible for health insurance, you're not eligible for COBRA coverage.
For your spouse or dependents to be covered under COBRA, you must have selected a family plan; otherwise you will be covered by an individual plan and your spouse and dependents will not be eligible.
If my domestic partner or same-sex spouse is covered under my benefits, will COBRA allow them to retain coverage if I lose my job?
Your employer may opt to allow you to continue health coverage through COBRA of your domestic partner or a same-sex spouse who is your dependent, but your employer is not required to do so. COBRA follows the provisions of the Defense of Marriage Act (DOMA) which only recognizes a marriage between a man and a woman.
The New York Marriage Equality Act recognizes same sex marriage if legal where performed. Please refer to the section regarding New York “mini-COBRA” below for additional information.
Can I choose to only continue medical coverage under COBRA?
It depends. If the school district that you were laid off from offers separate health insurance plans (dental, medical, prescription, or vision), you could choose which plans to continue. However, if the school district offered one plan with multiple health insurance benefits, you would not be able to choose.
When do I have to give notification to my employer that I want to continue health benefits under COBRA?
You have 60 days from the date coverage ends or from the date you are notified your coverage will end, whichever is later, to elect COBRA. Don't delay - health coverage is an important benefit and it's vital to protect your options.
What will this coverage cost my family and me?
Workers must pay 102 percent of the full-share premium.
If you do not elect to continue your health insurance coverage through COBRA and you create a gap in your health insurance of more than 63 days, you will lose your health insurance rights under the Health Insurance Portability and Accounting Act (HIPAA). An explanation of HIPAA follows shortly.
How often must I make the premium payments for COBRA?
There is a mandatory monthly payment option, meaning you must be given the option of paying COBRA premiums on a monthly basis. You cannot be required to pay COBRA premiums on any other basis, such as quarterly, semiannually, or annually. The initial premium payment must be made within 45 days from the date of COBRA election.
What is the maximum coverage period for COBRA?
It varies. If your job was terminated, if you resigned voluntarily, or if your hours were reduced, the maximum coverage time is 18 months for you, a spouse and dependent children.
In addition to the maximum coverage time, coverage will end if one of the following events occurs:
• The employer ceases to provide a group health plan to its employees;
• The laid-off employee fails to pay the required premiums in a timely manner;
• The laid-off employee becomes a covered employee under another group health plan; or
• The laid-off employee becomes eligible for Medicare.
What is New York's 'Mini-COBRA'?
This New York continuation of coverage law applies to individuals covered by group plans with less than 20 workers (not covered by federal COBRA) who lose coverage due to a job loss, reduction of work hours or loss of eligibility. It also applies to all workers who have exhausted federal COBRA continuation benefits allowing them to extend their health insurance from 18 to 36 months. The New York “mini-COBRA” continuation may be available for same sex spouses who lose coverage. Please contact your employer for specific information.
The New York "mini-COBRA" is not mandated for self-insured health plans.
Beyond COBRA, there are other health insurance options
If you have lost health insurance benefits due to job changes or divorce, and do not opt to continue coverage through COBRA, here are some avenues you can check out:
1. Healthy NY- www.dfs.ny.gov/healthyny 866-432-5849
2. Child Health Plus - www.health.ny.gov/health_care/child_health_plus 800-698-4543
3. Family Health Plus - www.health.ny.gov/health_care/family_health_plus 877-934-7587
4. Health insurance through a local chamber of commerce; if you own or work for a small business
5. University student health insurance
6. Standard private insurance in your county - www.dfs.ny.gov
7. Medicare - www.medicare.gov - for persons 65 or older and disabled individuals - www.medicare.gov
8. Options for continued coverage for disabled dependents
9. Veterans Benefits: the Aid and Attendance program provides a monthly stipend for long-term care.
10. If you are uninsured and have a pre-existing condition - www.pcip.gov 877-444-9622
Navigating these health plan options can be confusing. If you need assistance, please call NYSUT Social Services 800-342-9810, ext. 6206 for help in finding a plan which suits your family’s needs.
This represents a high-level overview of COBRA and does not constitute legal advice. For additional information, please visit the U.S. Department of Labor's website at www.dol.gov or call 1-866-4-USA-DOL
You have HIPAA rights that can help you continue health coverage in a new job
The Health Insurance Portability and Accountability Act protects many workers who change jobs or lose jobs by providing better access to health insurance coverage. It limits exclusions for pre-existing conditions; prohibits discrimination against employees and dependents based on their health status; and guarantees renewability and availability of health coverage to certain employees and individuals.
Here are some FAQs about HIPAA.
How does HIPAA help people who currently have health insurance through their employer and who want to change jobs?
Previously, some plans did not cover pre-existing medical conditions. HIPAA limits this practice so that most plans must cover an individual's pre-existing condition after 12 months. If at the time you change jobs you already have 12 months of continuous group health coverage, you will not have to start over with a new 12-month exclusion for any pre-existing conditions. Under HIPAA, your new employer will be required to give you credit for the length of time that you had continuous group health coverage.
What is a "pre-existing condition?
Under HIPAA a "pre-existing condition" is a condition for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period ending on the enrollment date in any new health plan. If you had a medical condition in the past, but have not received any medical advice, diagnosis, care or treatment within the six months prior to enrolling in the plan, your old condition is not a "pre-existing condition" for which an exclusion can be applied.
How does "crediting" for pre-existing conditions work under HIPAA?
You will receive credit for your previous coverage that occurred without a break in coverage of 63 days or more. However, any coverage occurring prior to a break in coverage of 63 days or more would not be credited against an exclusion period. So, if you've had 12 or more months of continuous coverage, you will have no pre-existing waiting period. If you had prior coverage for seven months, you can be subject to only a five-month exclusion period.
Are there "pre-existing conditions" that cannot be excluded from coverage?
Pre-existing condition exclusions cannot be applied to pregnancy, regardless of whether the woman had previous coverage. In addition, under the federal Affordable Care Act, there are no pre-existing conditions for children.
Will I be covered immediately under my new employer's plan?
Not necessarily. Employers and insurance companies may set a waiting period before enrollees become eligible for benefits under the plan. HMOs may have an "affiliation period" during which an enrollee does not receive benefits and is not charged premiums. Affiliation periods may not last for more than two months and are only allowed for HMOs that do not use exclusions of pre-existing conditions.
Does HIPAA require employers to offer health coverage or to provide specific benefits?
No. The provision of health coverage by an employer is still voluntary. HIPAA does not require specific benefits nor does it prohibit a plan from restricting the amount or nature of benefits for similarly situated individuals.
Getting help with prescription drug costs
When you lose a job that had prescription drug benefits, you have the option of continuing that prescription coverage through COBRA - but the cost to you may be prohibitive.
NYSUT Social Services says another way to get help with prescription costs is to apply for subsidies through a specific pharmaceutical company's Patient Assistance Plan that can help some patients pay for medications. Many local health clinics have sliding scale fees. Some prescription drug options:
1. Patient Assistance Programs (PAP) - www.rxassist.org. Each drug company sponsors its own assistance plan. When you access the Web site you can see if the particular drug you need is available through a PAP.
2. Elderly Pharmaceutical Insurance Coverage Program (EPIC)
800-332-3742. This is a New York state program that helps seniors pay for their prescription drugs. You must meet income eligibility requirements